Salcon Smile to acquire 70% stake in SPH Dental

The board of directors of Salcon Group announced on 29 Apr that Salcon Smile, an indirect 90%-owned subsidiary of Salcon Group, had entered into a conditional share sale agreement to acquire a 70% equity interest in SPH dental for a purchase consideration of US$1.52m (RM7.28m).

Salcon Smile
(Image: Salcon)

The announcement also shared that a put option agreement has been agreed for the remaining 30% equity interest in SPH Dental, subject to terms and conditions.

SPH Dental was incorporated on 5 Nov 2019 in Malaysia which operates four dental clinics under its brand in the country’s capital city of Kuala Lumpur.

Salcon Group is a Malaysian investment holding company with core investments in water and wastewater engineering & construction, focusing on the investment, design, construction, commissioning, operation & maintenance of water and wastewater treatment plants and ancillary facilities across Asia.

Through its indirect subsidiary Salcon Smile, the acquisition marks a move for the group to expand its healthcare business. The announcement provided a rationale for the proposed acquisition citing industry outlooks and future prospects of the Malaysia economy, healthcare industry, and the enlarged Salcon Group.

The announcement reads: “The proposed acquisition marks a strategic expansion for Salcon Group to expand its range of healthcare offering by venturing into the provision of dental services. Under its healthcare arm, the group is presently focused on the gloves business which comprise the manufacturing and trading of medical and industrial grade disposable latex, nitrile and polychloroprene gloves, covering various market segments such as dental, food, healthcare, industrial and laboratory.”

“The proposed acquisition provides Salcon Group an investment opportunity to expand and diversify its range of healthcare services and products offering by leveraging on the expertise, experience and network presence of SPH Dental in the provision of dental services, and in turn enables the Group to sustain further competitive advantage within the overall healthcare sector.”

The announcement added that factors such as the Malaysian’s economy projected growth between 4–5% in 2024, and the other services subsector projected rise of 5% contributed to the decision for the acquisition.

Barring any unforeseen circumstances and subject to all required approvals being obtained, the board of directors of Salcon Group expects the proposed acquisition to be completed by the second quarter of 2024.

Related: Royce Dental and Denticare merge following NTUC Health divestment